Lesson 2

Question 1

Our economy is made up of two broad groups:

Answer 1

1. Producers 2. Consumers

Question 2

Producer

Answer 2

person, company, or country that makes, grow, or supplies goods, or commodities for sale.

Question 3

Factors of production 4

Answer 3

1. Land - natural resources
2. Capital- money, tools, equipment, machinery etc
3. Labor - people/workers
4. Entrepreneurs- individual risk - takers

Question 4

__________ that is made requires these four factors of production

Answer 4

Everything

Question 5

Opportunity cost

Answer 5

the cost/value of the next best alternative given up. (Money time, resources)

Question 6

Trade offs

Answer 6

alternative choices that must be given up in favor of the choice we select ( all the other alternatives)

Question 7

Both ________ and __________ face opportunity cost and trade offs

Answer 7

Producers

Consumers

Question 8

Consumer

Answer 8

a person who purchases goods and services for personal use

Question 9

Consumer rights that protect them against producers - 5

Answer 9

1. Right to safety
2. Right to be informed
3. Right to choose
4. Right to be heard
5. Right to redress

Question 10

Consumerism

Answer 10

1960s

This social movement was an attempt to educate Byers about purchases they make and demand better and safer products

Question 11

Four economic systems

Answer 11

1. Traditional economy
2. Command economy
3. Market economy
4. Mixed economy

Question 12

Traditional economy

Answer 12

an economic system in which production, investment, prices, and incomes, are determined by rituals, habits, customs, and beliefs

Question 13

Advantage of traditional economy

Answer 13

1. Everyone knows what, how, and for whom to produce - based on tradition

Question 14

Disadvantage of traditional economy

Answer 14

1. Tens to discourage new ideas and new ways of doing things

2. Creates a lack of progress

Question 15

Command economy

Answer 15

an economic system in which production, investment, prices, and incomes are determined by a central authority (king, dictators state, government, etc

Question 16

Advantages of command economy

Answer 16

1. It can change direction drastically

2. Allows people to receive some services they otherwise may not be able to afford (healthcare)

Question 17

Disadvantages of command economy

Answer 17

1. Leaders provide for themselves at the expense of the general population (get rich)
2. The loss of individual freedom to choose
3. A low quality and quantity of goods
4. Tax rates are high

Question 18

What is a modern, liberal version of the command economy

Answer 18

Socialism

Question 19

Define socialism

Answer 19

an economic and political system in which the gov owns some, but not all the factors of production and makes most/all of the economic decisions

Question 20

Market economy

Answer 20

an economic system in which production, investment, prices, and incomes, are determined and controlled by buyers and sellers (individuals) freely conducting business

Question 21

Advantages of market economy

Answer 21

1. Individual freedom
2. It adjusts gradually to change over time
3. Relatively small degree of government interference
4. Provides a wide variety of goods and services

Question 22

Disadvantages of market economy

Answer 22

1. Does not provide for everybody

2. Can have a high degree of uncertainty

Question 23

Mixed economy

Answer 23

an economic system blending elements of market economies with elements or command economies and traditional economies

Question 24

Advantages of mixed economy

Answer 24

Can take on the advantages of the other economies

Question 25

Disadvantages of mixed economy

Answer 25

Can also take on the disadvantages of the other economies

Question 26

In a market economy, The what how and for whom to produce questions are answered by the….

Answer 26

Consumer

Question 27

In a command economy, who decides what how and whom to produce

Answer 27

Central authority

Question 28

Capitalism

Answer 28

the most powerful engine here rating wealth the world has ever seen

Question 29

Communism

Answer 29

Is an ideological and a social political movement whose aim is to set up a better version of society.

Question 30

Author of communism

Answer 30

Karl Marx

Question 31

• a communist society would be based on the _________ _____________ of the factors of __________ and would not rely on _________ __________, or _________ (extreme form of _________)

Answer 31

• this society would be based on the common ownership of the factors of production and would not rely on social classes, or money (extreme form of socialism)